Argentina’s credit risk, regional slowdown, Brazil votes

The rise in Argentina’s country risk premium continued this week and seems to reflect concerns about Milei’s re-election prospects next year. The country’s recent history provides reasons to think that a rise in support for the opposition could lead to disorderly moves in local markets. Meanwhile, the activity data published in the region this week suggest that most economies fared poorly in Q3, although Mexico is bucking that trend. Finally, while polls have narrowed Flávio Bolsonaro enters Brazil’s presidential election run-off on Sunday as a favourite and his victory largely seems priced into the markets.